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UDAN: Giving flight to aam aadmi’s aspirations

LiveMint logoLiveMint 30-04-2017 Anil Padmanabhan

Last week the prime minister formally kicked off an ambitious programme undertaken by the Union government to break the class barrier in air travel by flagging off the first flight from Shimla to Delhi.

The birth of budget air carriers in the late 1990s and their proliferation in the first decade of the new millennium brought flying within the purview of a rapidly burgeoning middle class. With UDAN or ‘Ude Deshka Aam Naagrik’ (enabling the common man to fly), as the new programme is called, capping the airfare for a one-hour journey on a fixed wing aircraft at Rs2,500, another glass ceiling in air travel just shattered. What takes roughly 10 hours of road travel can now be covered in an hour and is affordable too—this is indeed amazing empowerment.

Inaugurating the service Prime Minister Narendra Modi said as much. “The lives of the middle class are being transformed and their aspirations are increasing. Given the right chance, they can do wonders.”

Progressively, the material benefits are now beginning to be accessed by larger swathes of the population than ever before, triggering incredible transformations of their lives more than lifestyle.

The best example is ,of course, telecom. Even some two decades back, the landline was a prized possession and often seen as a sign of privilege. The birth of the cellphone and the rapidly falling cost of hardware and telecom services has meant that now almost 1 billion Indians are connected, just like falling two-wheeler prices have spread mobility.

The 2011 Census showed how India materially traded up—exactly why poverty levels have dropped so sharply. Suspect that by the time the 2021 Census is conducted the country would have transformed even more structurally—as a result inequality and not poverty could be the biggest development challenge. This is exactly what ties in with the growing aspirations.

In the case of UDAN-1 (the second phase of auctions are expected to be rolled out soon), it brings the country’s Tier-II and Tier-III towns on the country’s air map. Of the 70 airports served in the first phase of UDAN, 31 are currently unserved.

To be sure this would not have been possible without a host of concessions—shared between the Union government, state government and the airports. Yet it has piqued the interest of private operators who obviously see this as a means to tap newer markets; the government estimates UDAN-1 to cost the exchequer Rs200 crore annually.

There is a story behind how this sum was capped at such a modest level (though one will have to wait and see how this holds up once the roll-out of the scheme gains momentum). According to an insider, the initial plan chalked up by the consultants and bureaucrats came up short for one reason: it had no business plan for the potential operators and leaned heavily on the exchequer. Thereafter the entire plan was redrawn—subsidy is restricted to 50% of the seats—and finally UDAN-1, which was part of the new civil aviation policy, was ready to be offered for bidding.

It is then clear that UDAN-1 is seeking to give flight to the aspirations of the common man. As the cliché goes the proof of the pudding will lie in the eating.

Till then it is also a fact, as the energetic minister of state for civil aviation Jayant Sinha constantly points out: “Before UDAN, India had set up 76 operational airports in 70 years; and now in one year we will add 33.”

Anil Padmanabhan is executive editor of Mint and writes every week on the intersection of politics and economics.

His Twitter handle is @capitalcalculus.

Respond to this column at anil.p@livemint.com

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